Factories Corporation of Jamaica Limited (FCJ) is to spend $705 million this fiscal year on capital works, which will include the construction of 120,000 square feet of additional space in Naggo Head, St Catherine.

In addition, the FCJ is to retrofit approximately 66,000 square feet of existing factory space at the Montego Bay Free Zone for use in the information communication technology/business process outsourcing (BPO) sectors.

Similarly, the Montego Bay Free Zone says it plans to continue focusing on being the leading provider of space that supports the BPO sector in Jamaica. The entity said it intends to expand its operations through the construction of 63,000 square feet of rentable space.

“The projected development will partially satisfy the increased demand for space from existing and prospective operators in the BPO sector,” the entity said.

Vietnam has capitalised on increasing labour costs in China to take first place in the ranking while India remains the world’s largest business process outsourcing market.

Vietnam established its presence in the sector thanks to numerous government reform policies to promote the country as a key outsourcing destination. C&W predicts the service segment will expand rapidly given the average age of the country’s workforce is under 30 and 1-1.5 million people enter the labour market every year.

The software industry has increased rapidly in recent years with over 1,000 operating companies recruiting 80,000 labourers. Vietnam has become one of the world’s biggest software exporters and the second biggest outsourcing country for Japan.

C&W Vietnam’s Director of Valuation and Research Department Jonathan Tizzard said the ranking reflects the Government’s ability to create a stable business environment and introduce policies to improve education quality and professional skills for the younger generation.

Additionally, foreign direct investment to Vietnam is expected to increase with the signing of the Trans-Pacific-Partnership Agreement, possibly this year or in 2016, and once the two revised Laws on Housing and Real Estate officially take effect in July 2015, making room for foreign investors to operate in the country, he added.

C&W’s Head of occupier services for the Asia-Pacific and the Middle East and Africa Richard Middleton said that while Vietnam is not the cheapest outsourcing destination, it is still very competitive globally.

Wage increases in India and China have pushed Vietnam to top the rankings in 2015, he added.

The business process outsourcing (BPO) sub-industry has been identified as an area which will drive significant economic growth and employment generation.

“A national five-year strategy for the expansion of the sector which, all things being equal, should increase employment from the current levels of 15,000 to 30,000 by 2020 will be submitted to Cabinet shortly,” Dr Peter Phillips, the country’s finance minister, said in Parliament.

“A strategic objective is to move Jamaica up in the value chain in the BPO industry from simple call centres up to knowledge processing centres, outsourcing more professional services such as legal and accounting support, software development and technical support service,” Phillips added.

He said in recent months, there have been the construction and lease of 50,000 square feet of space in the Barnett Tech Park, and plans are being finalised for construction and lease for another 100,000 square feet.

Additionally, a 70,000-square-foot facility in Kingston (formerly the Claro building) is now being used for BPO operations on the basis of a local investor purchasing the building.

Phillips also said that a 70,000-square-foot BPO facility has been completed in Mandeville.

“All told, the sector is expected to add at a minimum another 6,400 jobs in 2015-2016,” the minister said.

He told Parliament that in order to enhance the employment-generating capacity and profitability of the investments of the BPO sector, the Growth Agenda Subcommittee of Cabinet will be giving oversight to JAMPRO in the provision of financing support for infrastructure development and training, as well as an aggressive marketing strategy.

Top software service exporters are under pressure to drop prices to retain contracts with marquee customers such as American Express and Home Depot that are up for renewal this year, according to executives and experts involved in the contract negotiations.

Rates have fallen by double digits for some of the biggest customer accounts in the past six months, with companies such as Infosys and Wipro sacrificing profit margins to gain market share and incremental revenue from these key accounts, they said.

Retaining strategic outsourcing contracts — that generate at least $100 million annually — is crucial to top IT firms such as TCS, Infosys and Wipro.

“We’re definitely feeling the heat in some of our key accounts — and there’s no way we can afford to lose a top customer since gaining new logos to make up for the shortfall is not an option,” said a Wipro executive, who requested anonymity.

An executive at another top IT firm, also declining to be identified, said as traditional businesses have become commoditised, no company could afford to charge a premium.

“Top customers are more aware now of the changing dynamics in the market and are taking the opportunity to negotiate multi-million dollar contracts at lower prices,” this person said.

Experts tracking the contract negotiations said prices could drop further over the next 3-4 quarters.

“It’s become a dog-eat-dog business more than ever,” said Phil Fersht, chief executive of outsourcing advisory firm HfS Research. “There is a clear downward pressure on all IT services pricing. We estimate this is a 3% price decrease per FTE (full time equivalent) per deal, on average, over the last 6 months.”

TCS, Cognizant and Infosys declined to comment for the story.

Infosys, TCS and Wipro are increasingly automating commoditized businesses like infrastructure management to improve margins but are forced to pass on a majority of the benefits to key customers such as Bank of America and Citigroup.

“We are seeing big price movement, some of it betting on increased maturity of autonomics. TCS, Wipro and Infosys have all signaled their move away from (automation company) IPSoft and towards internally developed autonomics solutions. I assume that this will give them more pricing flexibility than they were getting with third-party software,” said Bill Huber, a former IBM executive and managing director at outsourcing advisory firm Alsbridge.

For Infosys and Wipro, which have lagged average industry growth rates over the past three to four years, gaining market share at the cost of margins seems to be their best option in the near term to revive double-digit growth rates.

The term BPO stands for “Business Process Outsourcing”. Also known as outsourcing, it involves entrusting an outside organization with some non-critical functions of the business which they carry out in an efficient and time-economical manner. BPO services industry seems to be soaring high with more and more companies establishing and jumping on the bandwagon and following suit. This has become conducive to positive growth in the BPO industry.

Business Process Outsourcing occupies a major segment of the Information Technology Enabled Services (ITES) industry and is making rapid strides with each passing day. The BPO enables organizations to focus attention on the business-critical activities and pass the buck for everything else to outsource providers. In this way, BPO saves valuable time and resources of the company and shed a good deal of load off their shoulders so that they can build upon their core competencies.

Here are some of the ways to build a better business with outsourcing in 2015

Do Not Focus Much Attention on Cost: Although candidate available at relatively cheap rates may seem inviting to others but still the results in the long-run may make you rue your choice in hindsight. You can stay within your allotted budget while assessing the quality of results that you seek to procure. You should not fret about your budgeted constraints as there exist a number of reliable companies which deliver goods in quality services at affordable prices.

Incorporate Interview Techniques: You need not subject the company to grilling while sizing up a qualified outsourced vendor. Instead, you can lay out a checklist of questionnaire that is critical to the scope of your project.

References and Feedbacks: You can also draw out feedbacks from the former clients’ of the company by contacting them. This will have a significant bearing on your decision. You should lay thrust on whether the BPO provider in question is filled with gumption to deliver to the expectations of clients while checking for references.

Seek out a Candidate for a la carte category: This includes breaking a single project into diverse categories. Subsequently, you can integrate similar tasks that require same set of skills. This will facilitate decision-making related to selection of a team with extensive years of experience in the specific areas that suit the needs of the project.

All Scheduling and Scope is Clear and Understood: It becomes rather difficult to accomplish the expected results if the details you have given, carry an element of ambiguity. In many instances, project managers get stuck in a dilemma since they were not able to enlist their goals and needs in the clear manner. In order to steer clear of the problem, you need to scrutinize the assignment in the light of your needs and resources of the organization.

Realistic and Practical Expectations: It is not the case that you can elude the pressure related to project, especially in case of business process outsourcing. Since the thrust is laid on expectations, it becomes necessary that you do not encounter shift of focus and remain decisive about your requirements.

Focus on primary Areas of Competencies: It is factors of reallocation of accountability and control costs that press the company to outsource processes. This ensures that management focuses on core sphere of activities without dividing attention towards other areas.

Cut Down on Capital Expenditure: Outsourcing also comes in handy for the companies to avert capital expenditure which should rather be shelled out in pivotal areas of operations. This becomes imperative when you are in the face of shortage of funds and do not want to bear the brunt with overhead of procuring new systems and their subsequent maintenance. I recently hired a virtual assistant from this company and it worked great.

Specialized Skills and Cutting-edge Technology: BPO services employ specialized skills and employ cutting-edge technology in order to yields benefits with enhanced efficiencies, small capital investments, and reduced overheads. Other benefits of BPO include best practices while employing specialized skills and technology.

Proven Implement for Improved Efficiency in a Process: BPO services present a strategic management tool leveraged by organizations for the enhanced efficiency and effectiveness of a process, in addition to cutting down costs.

In the end, it is worth concluding that business process outsourcing can propel the growth of both larger and smaller businesses. You can easily locate the right BPO company for your business needs provided a good outsourcing strategy is in place.

BDO’s 2015 Technology Outlook Survey has revealed that the number of tech firms that either offshore or outsource their IT services has doubled in the past two years. Furthermore, the number of firms who say they are likely to outsource either IT or manufacturing processes to offshore locations has tripled, from 5 per cent to 14 per cent.

Amongst those firms that do currently outsource, the percentage that are outsourcing IT services and programming stands at 70 per cent, an increase from the 54 per cent of firms that answered similarly last year.

Aftab Jamil, partner at BDO, attributes this rise to the decreasing pool of skilled labour in the domestic market, remarking that “Locations like India and China are producing more engineers than the United States at this point in time, so given the talent pool that is available in the locations it is easier – even it’s no longer much more cost effective – to find the talent that you need.”

The survey found that 23 per cent of CFOs consider a lack of skilled workers as the greatest challenge to industry growth.